CODE OF VIRGINIA

INTEREST ON LIFE INSURANCE AND ANNUITY CONTRACT PROCEEDS (§ 38.2-3115)

A. If an action to recover the proceeds due under a life insurance policy or
annuity contract results in a judgment against the insurer, interest on the
judgment at the legal rate of interest shall be paid from (i) the date of
presentation to the insurer of proof of death on a life insurance policy or
annuity contract or (ii) the date of maturity of an endowment policy to the date
judgment is entered.

B. If no action is brought, interest upon the principal sum paid to the
beneficiary or policyowner shall be computed daily at an annual rate of two and
one-half percent or at the annual rate currently paid by the insurer on proceeds
left under the interest settlement option, whichever is greater, commencing (i)
from the date of death on a life insurance policy or annuity contract claim;
(ii) from the date of receipt of a completed claim form on a variable annuity
contract claim; or (iii) from the date of maturity of an endowment contract to
the date of payment. The interest shall be added to and become a part of the
total sum payable.

C. No insurer shall be required to pay interest computed under this section if
the total interest is less than five dollars.

D. This section shall not apply to (i) credit life insurance for which the
premium is paid wholly from funds of the creditor with no specific identifiable
charge being made to insureds for the insurance and upon which post-death
interest on the indebtedness is waived by the creditor in an amount at least
equal to the amount of interest that would otherwise be payable under this
section; (ii) credit life insurance payable in whole or in part to a creditor
that is an affiliate, as defined in § 13.1-725, of the insurer and that does
not charge interest on the indebtedness from the date of death of the insured;
or (iii) policies or contracts issued prior to July 1, 1977, but shall apply to
any renewals or reissues of group life insurance policies or contracts occurring
after that date.

HISTORY: 1977, c. 264, § 38.1-443.1; 1986, c. 562; 1991, c. 368; 2006, c. 209;
2014, cc. 155, 411.